Tuesday night when I was going through my chart scans, I noticed that some of the interactive gaming software companies (EA, MGAM, GA, TTWO, etc) were showing signs of accumulation.
Here's the chart of EA I annotated for my records (but didn't post anywhere) on Wednesday morning. It has the falling wedge pattern and a positive RSI divergence, along with a "W" bottoming formation.
Click on charts to enlarge:
I was watching the stock closely on Wednesday morning using 5 minute candles, when the stock started to get jumpy around 10:55 AM. It ramped up and just ticked above the trigger price of $16.56, and I bought at 16.57.
The stock then meandered sideways the rest of the day and I decided to hold it overnight. Here's a screenshot of the intraday 5 minute setup that I used.
On Thursday, the stock started with a long candle that started up, then reversed lower. The action in the early morning had a larger range than on Wednesday, and it made me uncomfortable for some reason. I wanted to see the price action stay in a tight range.
After watching the stock gyrate around in a range that was larger than what I wanted to see, albeit in lower volume, and with the stock heading for prior support at $16.35, at 10:14 AM I decided to pull the trigger and cut my loss.
Here's an intraday 5 minute chart showing my entry from Wednesday and the unfortunate, premature exit.
What a dumb thing to do, as I sold on THE lowest candle for the day. The stock proceeded to tighten up midday, then blasted out around 2:25 PM and made a nice move on expanding volume.
Why did I sell before the stock went through it's stop loss point? Why was I overly concerned with the early morning action when it did so on low volume and hadn't violated my stop loss point?
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